It is because the Spaniards could see that the person wearing was not bearing any weapon under the garment.

Proper undershirt for barong.

What is the correct shirt to wear underneath a Barong, and what is the proper way to wear it?
I've seen men wearing short-sleeved shirts tucked in their pants, but also seen others wearing long-sleeved shirts left untucked because you don't see the line on the arm where the shirt ends, or the line in the waist area where the shirt is tucked. It just seems cleaner without the edges showing through the barong.

What makes the Barong stand out from a regular dress shirt?

It is its fabrics material, transparency and elaborates embroidery. Barongs are traditionally creamy white/ off set white while more expensive ones are made from better materials displaying more of a silvery white.